Balancing your checkbook each month can save you money as overdrawing your checking account is getting more and more expensive.
UGA Cooperative Extension financial experts say the best way to avoid writing bad checks is to stay on top of your account balance. Use a checkbook register, record all transactions and reconcile the account online or with a statement provided by your financial institution. Never write checks or use your debit card when you do not have the money in your account to cover the transactions.
Paper checks no longer represent the largest portion of overdrafts. According to the Center for Responsible Lending, about 46 percent of all overdrafts are triggered by debit card point-of-sale transactions or ATM withdrawals. Paper checks represent only 27 percent of overdrafts.
But overdraft protection is not the best solution as it encourages overdrawing your account. A better option is to link your checking account to a savings account at the same institution. If your account is overdrawn, money will be transferred from your savings account to cover any overdrafts. In some instances the financial institution will transfer the exact amount needed. Or, the bank may only make transfers in $100 increments. A transaction fee also may be charged for the transfer. Another option: Link your checking or share draft account to a credit card or a line of credit from your financial institution.
